Corporate Accounting

This paper analyses the cash flow statement and other financial statements of CSR Limited, including changes in each item of cash flows statement, comparative analysis of the company’s three broad categories of cash flows, items of other comprehensive income statement, clear description of the firm’s income tax expense, verification of the figure of tax being same as the company tax rate times the firm’s accounting income, deferred tax that is reported in the balance sheet, current tax assets or income tax payable recorded by the company, verification of the income tax expense shown in the income statement same as the income tax paid shown in the cash flow statement, and unique characteristics in the financial statements, new insights, and other information.

Running head:CORPORATE ACCOUNTING
Corporate Accounting
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2CORPORATE ACCOUNTING
Table of Contents
Changes in each item of cash flows statement for the firm over the past year along with the
reasons for the change................................................................................................................3
Comparative analysis of the company’s three broad categories of cash flows that is operating
activities, investing activities and financing activities:..............................................................5
Items of Other Comprehensive Income Statement....................................................................6
Reasons for the items have not been reported in Income Statement/Profit and Loss Statement
....................................................................................................................................................7
Clear description of your firm’s income tax expense................................................................8
Verification of the figure of tax being same as the company tax rate times the firm’s
accounting income.....................................................................................................................8
Deferred tax that is reported in the balance sheet along with the reasons for the record...........9
Current tax assets or income tax payable recorded by the company.........................................9
Verification of the income tax expense shown in the income statement same as the income
tax paid shown in the cash flow statement...............................................................................10
Unique characteristics in the financial statements, new insights, and other information........10
Appendix..................................................................................................................................12

3CORPORATE ACCOUNTING
Changes in each item of cash flows statement for the firm over the past year along with
the reasons for the change
By evaluating the cash flow statements of the business organisations, it becomes
easier to gain an understanding of their inflows as well as outflows(Siew 2015). For this
paper, CSR Limited is chosen and each item of its cash flow statement is analysed critically
as follows:
Cash flows from operations:
The cash flow statement mainly consist of three sections that involves cash flow from
investing activities, operating activities, financing activities and net cash as well as cash
equivalents. The items that are included in the operating activities involves depreciation,
adjustments to net income, liabilities changes, inventory changes, changes in accounts
receivable and changes in other operating activities (Sierra‐García, Zorio‐Grima and García‐
Benau 2015). It has been seen that the total cash flow of operating activities has increased in
the year 2017 to $264800 from the year 2016 and 2015.
Cash flows from investing activities:
The items that are included in the investment activities are capital expenses,
investments and other cash flow from investment activities. It is evident that the total cash
used for the investment activities decreased in the year 2016 to -$80800 from $ -45400 in the
year 2015 and then decreased to $ -60700 in the year 2017.
Cash flows from financing activities:
In this cash flow statement of CSR limited, financing activities mainly consists of the
paid dividends, net borrowings, purchase as well as sale of stocks and other cash flows from

4CORPORATE ACCOUNTING
the financing activities. There has been rise in total cash used in the financing activities in the
year 2017 to $-257900 from the year 2016 and 2015.
Moreover, the change in cash and cash equivalents amounts to -$ 54000 in the year
2017, $4700 in the year 2016 and $4700 in the year 2015.
Comparative analysis of the company’s three broad categories of cash flows that is
operating activities, investing activities and financing activities:
In order to carry out the comparative analysis of the cash flow statement of CSR
Limited in 2017, the following figure is represented:
The above figure denotes continual rise in cash flows from operating activities in the
context of CSR Limited from $ 234300 in 2015 to $ 252200 million in 2016 and to $
2648000 million in 2017. The primary cause for rise in this section is the increase in amounts
from the customers. In addition to this, rise in receipt of interest and dividend could be held
accountable for this rise (Paterson 2016).
In relation to cash flows from investing activities, increase in cash outflows could be
observed in 2016 as opposed to 2015 from $45400 in 2015 to $80800 in 2016. This is
because additional investments are made in order to purchase cash and cash equivalents.
However, in 2017, decrease in cash outflows could be identified, which have been to $80800
in 2016 to -$607000 in 2017. This is because investment amounts have been reduced for
purchasing plant and equipment (Xu, Davidson and Cheong 2017).
For cash flows from financing activities, rising trend is observed in terms of outflows
from 2015 to 2017 from -$126800 in 2015 to -$166700 in 2016 and to -$257900 in 2017.
This is because additional dividend payments are made over the years coupled with the

5CORPORATE ACCOUNTING
borrowing repayments. All these reasons could be held accountable for rise in cash outflows
from financing activities (Spencer and Webb 2015).
Comparative analysis of three different categories of cash flow:
Particular
2017 in
$m
2016 in
$m
2015 in
$m
Net cash flow from operating
activities 2,64,800 2,52,200 2,34,300
Net cash flow from investing activities -60,700 -80,800 -45,400
Net cash flow from financing activities
-
2,57,900
-
1,66,700
-
1,26,800
2017 in $m 2016 in $m 2015 in $m
-300,000
-200,000
-100,000
0
100,000
200,000
300,000
Segment-wise comparison of Cash flow
statement
Net cash flow from operating activities Net cash flow from investing activities
Net cash flow from financing activities
Items of Other Comprehensive Income Statement
Certain significant items are reported under the comprehensive income statement in the
annual report of CSR Limited in 2017. These items take into account hedge loss or profit in
equity, hedge profit transfer to the financial performance statement, difference in exchange in
the translations related to foreign operations, variation in the fair value associated with cash
flow hedge reserve and benefits obtained from income tax of these items (Taylor &
Richardson 2014).

6CORPORATE ACCOUNTING
Reasons for the items have not been reported in Income Statement/Profit and Loss
Statement
In order to gain an in-depth understanding of the above-stated items reported in the
other comprehensive income statement of CSR Limited in 2017, the items that have been
found are foreign currency translation reservewhich is used for specific item is to convert the
outcomes of the cross-border subsidiaries of the parent organisation to the reporting currency
where financial reporting is conducted (Tschopp and Nastanski 2014). This is a significant
aspect in the consolidation procedure where the ascertainment of the cross-border currency of
the foreign subsidiary is made in the currency for conducting financial reporting process
(Jagannathan2017). The Cash flow hedge reserve helps in the exposure formed could be
minimised or removed because of the significant variations in asset and liability positions of
the corporate entities. Certain risk variations are the primary reasons behind the occurrence of
this item such as interest related to debt risk, risk related to interest rate and others (Wong and
Joshi 2015).
Clear description of the firm’s income tax expense
The basic purpose of CSR Limited in forming the other comprehensive income
statement delivers the users with the essential information in relation to the above-mentioned
aspects. Thus, this statement provides an overview of transparent and holistic approach of
such items. Such causes are not engaged directly in order to derive income (Wahlen, Baginski
& Bradshaw 2014).
Verification of the figure of tax being same as the company tax rate times the firm’s
accounting income
CSR Limited is obliged to conduct its tax accounting in accordance with the norms of
the Australian taxation law (Joubert, Garvie and Parle 2017). In the years 2016 and 2017, the

7CORPORATE ACCOUNTING
tax rate that could be applied to the organisation is 30%. Based on the statement of financial
performance in 2017, the income tax expense reported has been $61.70 million in 2017 and
$64.40 million in 2016.
Deferred tax that is reported in the balance sheet along with the reasons for the record
The Deferred tax is accounted by the method of balance sheet asset resulting from
temporary differences between the tax bases of liabilities and assets and their carrying
amount in the financial statements (Warren and Jones 2018). Recognition of deferred tax
liabilities are done to the extent that the availability of taxable profit in future is probable
against the temporary differences that are deductible. Deferred tax assets have been observed
to be $201.20 million in 2017, which were $239.30 million in 2016.
Current tax assets or income tax payable recorded by the company
As per the latest annual report of CSR Limited in 2017, it could be found that
adequate disclosures have been made regarding deferred tax assets and deferred tax
liabilities. Deferred tax assets have been observed to be $201.20 million in 2017, which were
$239.30 million in 2016. In 2016, deferred tax liabilities were reported to be $20.90 million,
while no such liabilities are realised in the year 2017. The Income tax expenses is the amount
that is calculated based on the standard accounting rules and on the amount of tax that is
owed by company to tax authorities (Ijiri 2018). Income tax payable is the amount that the
company owes in terms of tax based on tax code rules. Until the company makes the payment
of tax, the amount of income tax payable appears on the balance sheet section as liability.

8CORPORATE ACCOUNTING
Verification of the income tax expense shown in the income statement same as the
income tax paid shown in the cash flow statement
According to the latest annual report of CSR Limited, the income tax expense of the
organisation has been $61.70 million in 2017, which was $64.40 million in 2016. On the
contrary, the disclosed income tax expense in the cash flow statement has been $52.70
million in 2017 as opposed to $14.60 million in 2016. This clearly signifies the difference
between the two reported amounts. In this case, it is worth mentioning that the income tax
expense recorded in the income statement is the amount incurred in the current taxation year
of the organisation and the payment is required to be made in the upcoming year.
Unique characteristics in the financial statements, new insights, and other information
On the basis of the analysis of all the disclosed financial information, no surprising or
confusing elements could be observed in the tax-related treatment of CSR Limited. This is
because the organisation has supplied the necessary justifications and clarifications of the
taxation treatment as footnotes in the financial report (Brooks 2015). It can be seen from the
above discussion that this enterprise has followed all the basic requirements of the Australian
Tax Office (ATO) while estimating different taxes that has been included in the financial
statement of the company. CSR Limited needs to incur lower depreciation amount because of
the variations in the norms of preparing the income statement.

9CORPORATE ACCOUNTING
References
Brooks, R., 2015. Financial management: core concepts. Pearson.
Ijiri, Y., 2018. An Introduction to Corporate Accounting Standards: A Review. Accounting,
Economics, and Law: A Convivium, 8(1).
Joubert, M., Garvie, L. and Parle, G., 2017. Implications of the New Accounting Standard for
Leases AASB 16 (IFRS 16) with the Inclusion of Operating Leases in the Balance Sheet. The
Journal of New Business Ideas & Trends, 15(2), pp.1-11.
Paterson, R., 2016. Off balance sheet finance. Springer.
Sierra‐García, L., Zorio‐Grima, A. and García‐Benau, M.A., 2015. Stakeholder engagement,
corporate social responsibility and integrated reporting: an exploratory study. Corporate
Social Responsibility and Environmental Management, 22(5), pp.286-304.
Siew, R.Y., 2015. A review of corporate sustainability reporting tools (SRTs). Journal of
environmental management, 164, pp.180-195.
Spencer, A.W. and Webb, T.Z., 2015. Leases: A review of contemporary academic literature
relating to lessees. Accounting Horizons, 29(4), pp.997-1023.
Taylor, G., & Richardson, G. 2014. Incentives for corporate tax planning and reporting:
Empirical evidence from Australia. Journal of Contemporary Accounting &
Economics, 10(1), 1-15.
Tschopp, D. and Nastanski, M., 2014. The harmonization and convergence of corporate
social responsibility reporting standards. Journal of Business Ethics, 125(1), pp.147-162.
Wahlen, J., Baginski, S., & Bradshaw, M. 2014. Financial reporting, financial statement
analysis and valuation. Nelson Education.

10CORPORATE ACCOUNTING
Warren, C.S. and Jones, J., 2018. Corporate financial accounting. Cengage Learning.
Wong, K. and Joshi, M., 2015. The impact of lease capitalisation on financial statements and
key ratios: Evidence from Australia. Australasian Accounting Business & Finance
Journal, 9(3), p.27.
Xu, W., Davidson, R.A. and Cheong, C.S., 2017. Converting financial statements: operating
to capitalised leases. Pacific Accounting Review, 29(1), pp.34-54.

11CORPORATE ACCOUNTING
Appendix
Cash Flow(All numbers in thousands) 2017 2016 2015
Net Income
1,77,90
0
1,42,30
0
1,25,50
0
Operating Activities, Cash Flows Provided By or Used
In
Depreciation 83,600 80,000 75,100
Adjustments To Net Income 21,800 21,600 -6,600
Changes In Accounts Receivables 5,700 -26,200 -27,200
Changes In Liabilities 19,700 12,600 29,200
Changes In Inventories -15,700 1,000 -3,800
Changes In Other Operating Activities -34,800 -30,400 -4,300
Total Cash Flow From Operating Activities
2,64,80
0
2,52,20
0
2,34,30
0
Investing Activities, Cash Flows Provided By or Used
In
Capital Expenditures -93,200
-
1,20,00
0 -93,600
Investments - - -
Other Cash flows from Investing Activities - - -
Total Cash Flows From Investing Activities -60,700 -80,800 -45,400
Financing Activities, Cash Flows Provided By or Used
In
Dividends Paid
-
1,26,30
0
-
1,16,40
0 -68,300
Sale Purchase of Stock - - -
Net Borrowings 28,300 -10,400 -34,400
Other Cash Flows from Financing Activities
-
1,50,20
0 -31,700 -20,700
Total Cash Flows From Financing Activities
-
2,57,90
0
-
1,66,70
0
-
1,26,80
0
Effect Of Exchange Rate Changes -200 -200 400
Change In Cash and Cash Equivalents -54,000 4,700 62,500
Income Statement(All numbers in
thousands) 2017 2016 2018
Revenue
Total Revenue
24,68,30
0
22,98,80
0
20,23,40
0
Cost of Revenue 16,34,60 15,27,20 13,68,90

12CORPORATE ACCOUNTING
0 0 0
Gross Profit 8,33,700 7,71,600 6,54,500
Operating Expenses
Research Development - - -
Selling General and Administrative 5,73,600 5,38,800 4,69,300
Non Recurring - - -
Others -3,400 25,200 25,500
Total Operating Expenses
22,04,80
0
20,91,20
0
18,63,70
0
Operating Income or Loss 2,63,500 2,07,600 1,59,700
Income from Continuing Operations
Total Other Income/Expenses Net 3,300 26,100 33,200
Earnings Before Interest and Taxes 2,63,500 2,07,600 1,59,700
Interest Expense -3,400 -4,100 -6,400
Income Before Tax 2,66,800 2,33,700 1,92,900
Income Tax Expense 61,700 64,400 46,200
Minority Interest 51,500 1,32,500 60,300
Net Income From Continuing Ops 2,05,100 1,69,300 1,46,700
Non-recurring Events
Discontinued Operations - - -
Extraordinary Items - - -
Effect Of Accounting Changes - - -
Other Items - - -
Net Income
Net Income 1,77,900 1,42,300 1,25,500
Preferred Stock And Other Adjustments - - -
Net Income Applicable To Common
Shares 1,77,900 1,42,300 1,25,500
Balance Sheet(All numbers in
thousands) 2017 2016 2015
Period Ending
Current Assets
Cash And Cash Equivalents 19,100 73,100 68,400
Short Term Investments - - -
Net Receivables 3,13,000 3,20,100 2,81,000
Inventory 3,85,700 3,48,800 3,20,000
Other Current Assets 5,900 32,700 30,400
Total Current Assets 7,36,800 7,85,700 7,04,900
Long Term Investments 39,900 61,000 63,300
Property Plant and Equipment 8,48,200 8,64,000 8,21,300
Goodwill 97,100 74,200 66,100
Intangible Assets 46,700 48,100 42,100

13CORPORATE ACCOUNTING
Accumulated Amortization - - -
Other Assets 3,28,400 3,82,800 4,21,600
Deferred Long Term Asset Charges 2,01,200 2,39,300 2,61,900
Total Assets
20,97,10
0
22,15,80
0
21,19,30
0
Current Liabilities
Accounts Payable 2,40,500 2,27,100 2,02,100
Short/Current Long Term Debt 30,500 2,200 -
Other Current Liabilities 1,59,600 1,55,800 1,66,400
Total Current Liabilities 5,13,600 4,88,800 4,66,300
Long Term Debt 30,500 2,200 -
Other Liabilities 3,46,500 4,07,600 4,47,000
Deferred Long Term Liability
Charges - - -
Minority Interest 51,500 1,32,500 60,300
Negative Goodwill - - -
Total Liabilities 8,90,600 8,98,600 9,13,300
Stockholders' Equity
Misc. Stocks Options Warrants - - -
Redeemable Preferred Stock - - -
Preferred Stock - - -
Common Stock
10,36,80
0
10,41,10
0
10,42,20
0
Retained Earnings 1,91,600 1,23,200 86,400
Treasury Stock -73,400 20,400 17,100
Capital Surplus - - -
Other Stockholder Equity -73,400 20,400 17,100
Total Stockholder Equity
11,55,00
0
11,84,70
0
11,45,70
0
Net Tangible Assets
10,11,20
0
10,62,40
0
10,37,50
0